Safe and Sound

FEDERAL EMPLOYEES

MONROE, LA
5
Star Rating
Founded in 1941, FEDERAL EMPLOYEES is an NCUA-insured credit union headquartered in MONROE, LA. Regulatory filings show the credit union having $17.6 million in assets, as of June 30, 2017.

Members have $13.0 million on deposit tended by 4 full-time employees. With that footprint, the credit union holds loans and leases worth $13.0 million. FEDERAL EMPLOYEES's 1,440 members currently have $12.0 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, FEDERAL EMPLOYEES exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for an analysis of how the credit union did on the three key criteria Bankrate used to evaluate U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial stability, capital is essential. It acts as a buffer against losses and affords protection for members when a credit union is struggling financially. From a safety and soundness perspective, the higher the capital, the better.

On our test to measure capital adequacy, FEDERAL EMPLOYEES racked up 30 out of a possible 30 points, beating the national average of 15.26.

FEDERAL EMPLOYEES had a capitalization ratio of 31.00 percent in our test, higher than the average for all credit unions, an indication that it's on more solid financial footing than its peers.

Asset Quality Score

In this test, Bankrate tries to determine the impact of troubled assets, such as unpaid loans, on the credit union's loan loss reserves and overall capitalization.

Having a large number of these kinds of assets could eventually require a credit union to use capital to absorb losses, reducing its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the credit union, pushing down earnings and increasing the chances of a failure in the future.

FEDERAL EMPLOYEES scored 40 out of a possible 40 points on Bankrate's test of asset quality, exceeding the national average of 38.15.

The credit union's ratio of troubled assets was 2.00 percent in our test, less than the national average and suggestive of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at making money affects its safety and soundness. A credit union can retain its earnings, giving a boost to its capital buffer, or put them to work addressing problematic loans, likely making the credit union better prepared to withstand financial trouble. Credit unions that are losing money, however, are less able to do those things.

FEDERAL EMPLOYEES outperformed the average on Bankrate's test of earnings, achieving a score of 12 out of a possible 30.

One sign that the credit union is outperforming its peers in this area was its earnings ratio of 6.00 percent in our test, above the average for all credit unions.








WHAT IS SAFE & SOUND?

Bankrate.com's Safe & Sound Ratings provide a star rating system to evaluate the current financial status of financial institutions. The information gathered about banks, credit unions and thrifts is updated as set forth in the Terms of Use of Safe & Sound Ratings and Reports. The Safe & Sound Ratings information is grouped by categories of banks, thrifts and credit unions.

Scoring methodology

Bankrate.com evaluates the financial condition of institutions and assigns a one- to five-star rating for each with five stars representing the highest rating. Institutions with satisfactory performance will generally receive a rating of three or more stars. The majority of institutions fall into the three- to four-star range. An institution with an "NR" rating may be too new to rate or may have limited the publicly available information in their regulatory filings. The "NR" is not an indication of financial strength or weakness. The Safe & Sound rating is believed to be reliable, but the information is not guaranteed. In addition, events since the information was collected may have altered the institution's financial condition.